LGIM Real Assets buys Stafford retail park at 6.8% yield

The acquisition of Riverside retail park in Stafford from LXB Retail Properties marks the final acquisition for Legal & General's second UK Property Income Fund (UK PIF II).

As part of a linked transaction, the Legal & General Leisure Fund has also entered a forward commitment to purchase the adjacent leisure development known as Waterfront for £15 mln, which will be anchored by Odeon cinemas.

The retail and leisure scheme was developed in 2016 and provides a total of 102,060 sq ft (9,500 m2) of retail accommodation across 17 retail units. The anchor tenants are M&S and Primark, with other tenants including River Island, H&M, Outfit and JD Sports. There are currently four vacant units, two of which are under offer.

The scheme benefits from a 1,025 space multi-storey car park located in the Waterfront and an additional 180 spaces underneath Riverside; both car parks are operated by the local authority. Waterfront will include six restaurants and a six screen Odeon cinema. Nandos and Frankie & Benny’s are already trading.

UK PIF II has a seven year life span and delivers a core/core-plus risk strategy and includes investment from Legal & General Group and the fund team with a total buying power or Gross Asset Value (GAV) of £610 mln when including gearing.

Following this latest acquisition, UK PIF II has built up a balanced portfolio of 13 properties to date, totalling £525 mln.

Separately, LGIM Real Assets also announced this week that it has made three senior appointments for its Private Credit business, with Blackstone Real Estate's former managing director Lorna Brown joining as head of Real Estate Debt EMEA, New York Life Investors' former executive Stuart Hitchcock as senior portfolio manager and Matthew Taylor from HSBC as senior investment manager, Corporate Private Debt.

The team now manages £7 bn of private credit assets having deployed £2.7 bn of new money in 2017.